Ambassador Mehdi Sanaei said the two close trading partners have been negotiating Iran's delivery of hundreds of thousands of barrels of oil a day since September when Russian President Vladimir Putin met with his Iranian counterpart Hassan Rouhani.

Russian officials had previously neither confirmed nor denied the discussions. But they stressed that such deliveries would not break existing UN sanctions on the Islamic Republic.

However, Washington and the EU have imposed their own restrictions over Tehran's disputed nuclear program that also penalize countries and companies dealing in certain areas with Iran.

The White House last month expressed "serious concern" over the rumored oil-for-goods swap - which one Russian report said concerned the delivery of 500,000 barrels of crude per day - because it could potentially boost Iran's energy exports by more than 50 percent.

Iran's crude shipments are believed to have shrunk under the impact of the unilateral Western sanctions from 2.5 million barrels per day in late 2011 to less than one million barrels per day at the end of last year.

Sanaei said Iran was interested in acquiring Russian heavy trucks and railroad equipment in exchange for the deliveries.

"A part of the funds (for the oil sale) could also go toward the construction by Russian companies of a second nuclear reactor at Bushehr," Sanaei told Kommersant business daily.

Russia completed the construction of the Islamic Republic's sole nuclear power plant after the project was dropped by Germany's industrial giant Siemens following Iran's 1979 revolution.

The Persian Gulf plant came into service in 2011 after several delays blamed on technical problems. Iranian engineers took complete control of the facility last September.

The plant's single reactor produces 1,000 megawatts of electricity - a small fraction of what the oil-rich country says it wants to produce from nuclear power.

Western nations and Israel suspect that the Islamic Republic's nuclear program masks a covert weapons drive - a charge Tehran denies.

Sanaei's confirmation of the oil-for-goods talks comes a day before world powers and Iran resume negotiations in Vienna aimed at reaching a comprehensive accord on Tehran's nuclear drive.

Iran has agreed to freeze some nuclear activities for six months under a landmark interim deal sealed last November.

It won modest sanctions relief in return that also included a promise by Western powers not to impose new restrictions on its hard-hit economy.

But most of the Western oil sanctions against the Islamic Republic remain in place.

Relations between Russia and Iran have wavered throughout history but included a close alliance in the 1980s after the fall of the shah.